Futures
Futures
Futures, or futures contracts are contracts between buyers and sellers. The buyer or seller must transact at a predetermined price when (not before) the allotted time frame ends. These contracts can be traded on a futures exchange.
There are various types of futures contracts, such as in commodities, stock indices, currencies, metals and the US treasury. Most investors use futures to limit the risk of price fluctuation of an underlying asset.
Ideally, futures contracts oppose your underlying asset's movements. The idea is that if your asset makes a loss, your futures contract will balance it out and vice versa. If you see your futures moving in a direction that is unfavourable you can trade your futures before the expiration date.
Disclaimer
The content on this page is for information purposes only, it does not expressly or implicitly provide financial, legal, tax, or investment advice or recommendations, the opinions are those of the author. Individual investors should make their own decision when investing as investing in securities carries risk and it’s the individual investor’s responsibility to assess the risk before making any decision. It’s the investor’s sole responsibility to make their own decisions and determine the appropriateness of an investment or strategy based on their own personal investment objectives, financial circumstances, and risk tolerance. Past performance is no guarantee of future results. Historical returns, expected returns, and probability projections are provided for informational and illustrative purposes and may not reflect actual future performance. Any articles, daily news, analysis, and/or other information contained in the blog should not be relied upon for investment purposes. The content provided is neither an offer to sell nor purchase any security. Opinions, news, research, analysis, prices, or other information contained on our Blog, or emailed to you, are provided as general market commentary. InvestSky does not warrant that the information is accurate, reliable, or complete. Any third-party information provided does not reflect the views of InvestSky. InvestSky shall not be liable for any losses arising directly or indirectly from misuse of information. Each decision as to whether a self-directed investment is appropriate or proper is an independent decision by the reader. All investing is subject to risk, including the possible loss of the money invested.
Was this article helpful? Share it!
